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Financial Leverage and Shareholders Wealth Creation of Quoted Industrial Goods Firms in Nigeria

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Financial Leverage and Shareholders Wealth Creation of Quoted Industrial Goods Firms in Nigeria


Omabu, Stanley Ebuka | Okoye, Pius V. C. | Amahalu, Nestor N.



Omabu, Stanley Ebuka | Okoye, Pius V. C. | Amahalu, Nestor N. "Financial Leverage and Shareholders Wealth Creation of Quoted Industrial Goods Firms in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-6, October 2021, pp.672-682, URL: https://www.ijtsrd.com/papers/ijtsrd47481.pdf

This study ascertain the relationship between financial leverage and shareholders wealth creation of quoted industrial goods firms in Nigeria for a period of thirteen years spanning from 2008-2020. Specifically, this study ascertained the relationship between debt-to-equity ratio and cash value added. Ex-Post Facto research design was employed. The Panel data sets used in this study were obtained from the annual reports and accounts of thirteen (13) quoted industrial goods firms. Descriptive statistics of the dataset from the sampled industrial goods firms was employed to describe using the mean, standard deviation, minimum and maximum values of the data for the study variables. Panel Least Square (PLS) regression analysis and Hausman test were applied to test the hypothesis of the study. The specific findings showed that there is a significant and positive relationship between Debt-to-Equity Ratio and Cash Value (p-value = 0.0003<0.05). The study recommended inter alia that bankers and debt providers should help industrial goods firms by charging lower cost of debt. The lower cost of debt financing helps to bring down the required rate of return on the capital project being financed, thus, improving its profit margins.

Financial leverage, Debt-to-equity ratio and Cash value added


IJTSRD47481
Volume-5 | Issue-6, October 2021
672-682
IJTSRD | www.ijtsrd.com | E-ISSN 2456-6470
Copyright © 2019 by author(s) and International Journal of Trend in Scientific Research and Development Journal. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (CC BY 4.0) (http://creativecommons.org/licenses/by/4.0)

International Journal of Trend in Scientific Research and Development - IJTSRD having online ISSN 2456-6470. IJTSRD is a leading Open Access, Peer-Reviewed International Journal which provides rapid publication of your research articles and aims to promote the theory and practice along with knowledge sharing between researchers, developers, engineers, students, and practitioners working in and around the world in many areas like Sciences, Technology, Innovation, Engineering, Agriculture, Management and many more and it is recommended by all Universities, review articles and short communications in all subjects. IJTSRD running an International Journal who are proving quality publication of peer reviewed and refereed international journals from diverse fields that emphasizes new research, development and their applications. IJTSRD provides an online access to exchange your research work, technical notes & surveying results among professionals throughout the world in e-journals. IJTSRD is a fastest growing and dynamic professional organization. The aim of this organization is to provide access not only to world class research resources, but through its professionals aim to bring in a significant transformation in the real of open access journals and online publishing.

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